Older Americans in nearly every state are on track to outlive their retirement income and savings. A new analysis found that across the U.S., older adults face an average gap of about $115,000 between what they’re projected to spend during retirement and what they’re likely to bring in from Social Security, savings, and investments. That number is jarring on its own, but the real weight of the finding is in how far it spreads.
In 41 states and Washington, D.C., retirees are expected to fall short. Only in nine states do seniors have enough of a financial cushion to fully cover their costs. Nine states. Out of fifty. And in several of those, the cushion is so thin it could disappear with one bad year of medical bills or an unexpected housing repair.
The gap between what people have saved and what retirement actually costs isn’t new news, but the state-by-state breakdown adds a layer of detail that average national figures tend to flatten. The difference between retiring in New York and retiring in Washington state isn’t a rounding error – it’s hundreds of thousands of dollars. Where you land matters as much as how much you saved along the way.
The National Picture: A $115,000 Gap
A new analysis from Seniorly draws on state-level estimates of life expectancy at age 65, average retirement benefits, median net worth, and expected retirement expenses. On average, an American retiree can expect about $762,000 in income from Social Security and other benefits, savings, and investments, set against typical living expenses of $877,000 during retirement. That leaves a shortfall of $115,000.
The methodology matters here because it tells you what you’re actually measuring: not just savings in isolation, but the full financial picture of what retirement looks like from 65 onward – income coming in, expenses going out, and how long that equation has to hold.
According to the CDC’s 2024 national mortality data, life expectancy at age 65 for the total population is now 19.7 years, meaning the average new retiree needs their money to last nearly two decades. That’s a long time for a fixed pool of savings to stretch. It’s also an average, which means millions of people will live considerably longer.
The Worst States: Where the Gap Turns Into a Chasm
New York is the worst state for seniors outliving their savings, with an average shortfall of $448,000 between costs and income from investments, retirement savings, and Social Security benefits. New Yorkers would need $1.12 million to cover living expenses over 19.4 years of expected retirement without depleting their savings.
The average senior in New York can expect about $1.1 million in expenses and $670,000 in income over that 19.4-year retirement span – a projected shortfall of $448,000. That’s not a planning miscalculation. That’s a structural mismatch between what the state costs and what most people can realistically accumulate.
Hawaii and Washington, D.C. also rank among the worst, with seniors facing major shortfalls of $417,000 and $407,000 respectively, driven by sky-high living costs. Hawaii presents a particularly striking case. Seniors in Hawaii can expect to live another 20.6 years past 65 – and despite having the highest projected retirement income of $1.32 million in the country, the combination of longevity and the highest cost of living of any state still leaves them $417,000 short.
Rounding out the bottom five are Alaska and California, where expenses including housing and healthcare put a heavy strain on retirement savings. California seniors can expect $926,000 in income and $1.3 million in expenses over a 19.3-year retirement – a projected shortfall of $337,000.
The States That Work – and Why
Nine states manage to project a retirement surplus, and the list is worth looking at closely because the geography is not what you’d expect.
Washington state leads with a $146,000 cushion, followed by Utah ($121,000), Montana ($43,000), Colorado ($38,000), Iowa ($32,000), Minnesota ($23,000), Maryland ($13,000), Kansas ($8,000), and South Carolina ($2,000).
Washington state’s top ranking is driven by relatively high projected income and moderate expenses – a combination that produces a surplus of around $146,000. Seven of those nine states sit in the West or Midwest, which reflects something real: moderate housing markets, generally lower healthcare costs, and cost-of-living indexes that haven’t spiraled the way coastal metros have.
The surpluses at the lower end of that list are precarious, though. South Carolina’s projected $2,000 cushion is effectively zero once you account for any unexpected expense. Maryland’s $13,000 margin won’t survive a single year of assisted living. The practical gap isn’t really “surplus” versus “deficit” – it’s “devastating shortfall” versus “just barely okay.”
The Low-Income Trap: Why Cheap States Still Struggle
One of the more counterintuitive findings in the analysis is that a low cost of living doesn’t automatically translate to a secure retirement.
States with a lower cost of living don’t necessarily mean a better financial situation for their seniors. Mississippi, for example, is the second cheapest state to retire in, according to the analysis, but it ranks 12th for retirement gap. Its retirees need $162,000 in retirement savings above their projected income to cover expenses.
Mississippi, West Virginia, Alabama, and Louisiana – all among the states with the lowest life expectancy in the country – still have retirement gaps above the national average. Lower life expectancy reduces the total years a person needs to fund, yet the savings available in those states are so modest that they still fall behind. Louisiana and Mississippi have the smallest projected retirement incomes of any state, at just $479,000 and $488,000 respectively.
The problem isn’t that people in those states are spending too much. It’s that decades of lower wages, limited access to employer retirement plans, and reduced Social Security contributions have compounded into a savings gap that a low grocery bill can’t fix.
What the Generations Think Is Coming
The Seniorly numbers describe what the math projects. Survey research tells you what people actually believe – and the two line up in uncomfortable ways.
More than half of Gen Xers (56%) think it’s likely they’ll outlive their savings, compared to 40% of Baby Boomers and older. That Gen X number is striking given that the oldest members of the generation are now in their early 60s, with retirement no longer a distant abstraction.
According to Northwestern Mutual’s 2025 Planning and Progress Study, Americans’ “magic number” to retire comfortably is $1.26 million – down from $1.46 million the previous year. More than half of Americans (51%) think it’s somewhat or very likely they will outlive their savings. Only 16% feel confident enough to call that outcome “very unlikely.” Meanwhile, more than a third say they have taken no steps at all to address the risk.
The oldest members of Generation X turn 60 this year, and 54% think they will not be financially ready for retirement, according to the same study. Gen X respondents said they will need an average of $1.57 million to retire comfortably – $310,000 more than the national average. That gap between what they think they need and what they’ve managed to save represents a quiet crisis playing out in real time.
The Longevity Problem That Nobody Plans For
Most retirement plans are still built around assumptions that don’t reflect how long people are actually living. Higher life expectancies mean many Americans may outlive their retirement savings – and the new data shows that a person’s likelihood of doing so varies dramatically based on where they live.
The number of Americans over age 90 tripled between 1980 and 2010, and is projected to quadruple by 2050, according to census data. People who underestimate how long they’ll live could save too little for retirement and run out of money – a prospect that surveys consistently show people fear more than death itself.
Social Security payments cover about 30% of a retiree’s living expenses on average, meaning the rest falls on personal savings and investments. Social Security doesn’t run out, but savings do. And the more expensive your state, the faster that drawdown happens.
What to Do With This
The findings are sobering but not a verdict. Projections built on averages don’t account for individual choices, and where you retire is, for many people, a genuine variable.
As Christine Healy, chief growth officer at Seniorly, put it: “Where you retire can be just as important as how much you save.” That observation carries practical weight. A 65-year-old who moves from California to Iowa doesn’t just reduce their grocery bill – they change their projected retirement trajectory by hundreds of thousands of dollars.
For those who can’t or won’t relocate, the arithmetic still works in other ways. Delaying Social Security claims past full retirement age increases monthly benefits substantially. When you claim Social Security matters more than most people realize, and claiming later versus earlier can mean hundreds of thousands of dollars more over a lifetime. Catch-up contributions to a 401(k) or IRA (available from age 50 onward) let older workers accelerate savings in the final working years. And healthcare planning – often the most overlooked piece – can mean the difference between a manageable shortfall and a catastrophic one.
The honest takeaway here isn’t that everything will work out if you just plan hard enough. For some people in some states, the math is genuinely difficult. Most of the nine states with a surplus are ones people don’t immediately think of as retirement destinations – and that’s exactly the point. The data doesn’t care about the plan you had at 40. It cares about your cost of living, your savings rate, and how long you live. Two of those three things are at least partially in your control. Knowing which side of the 41-state divide you live on is a reasonable place to start figuring out the rest.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.